HELIX ENERGY SOLUTIONS GROUP INC

Previous wording

Demand for our services is primarily influenced by the condition of the oil and gas and the renewable energy markets and, in particular, the willingness of offshore energy companies to spend on operational activities and capital projects. The performance of our business is largely affected by the prevailing market prices for oil and natural gas, which are impacted by domestic and global economic conditions, hydrocarbon production and capacity, geopolitical issues, weather, global health, and various other factors. Demand for decommissioning, which has been an area of growth for us in recent years, is affected by commodity prices as well as governmental regulations and political forces globally.

Current wording

Demand for our services is primarily influenced by the condition of the oil and gas and the renewable energy markets and, in particular, the willingness of offshore energy companies to spend on operational activities and capital projects. The performance of our business is largely affected by the prevailing market prices for oil and natural gas, which are impacted by domestic and global economic conditions, hydrocarbon production and capacity, geopolitical issues, weather, global health, and various other factors. Demand for decommissioning is affected by commodity prices as well as governmental regulations and political forces globally.

Previous wording

Oil prices continue to be volatile but have generally remained robust since 2020. Global demand for oil continues to experience growth, and we expect the current market conditions will maintain continued customer spending for the industry. Despite the current commodity price environment, factors that could threaten the current commodity price environment persist, including regional conflicts, unrest in the Middle East, decisions from members of the Organization of Petroleum Exporting Countries (“OPEC”) and other non-OPEC producer nations (collectively with OPEC members, “OPEC+”), various governmental and customer sustainability initiatives and continued shifting of resource allocation to renewable energy. We expect these factors will continue to contribute to commodity price volatility with the potential to temper customer spending for oil and gas projects.

Current wording

Oil prices continue to be volatile but have generally remained robust since 2020. Global demand for oil continues to experience growth albeit at slower rates, and we expect the current market conditions will maintain continued customer spending for the industry. However, factors that could threaten the current commodity price environment persist, including regional conflicts, unrest in the Middle East, decisions from members of the Organization of Petroleum Exporting Countries (“OPEC”) and other non-OPEC producer nations (collectively with OPEC members, “OPEC+”), the global economy and the demand for oil and gas in China in particular, various governmental and customer sustainability initiatives and continued shifting of resource allocation to renewable energy. We expect these factors will continue to contribute to commodity price volatility with the potential to temper customer spending for oil and gas projects.

Previous wording

We support the energy transition to renewable energy through our services in offshore wind farm developments, primarily including subsea cable trenching and burial as well as seabed clearance and preparation services. Demand for our services in the renewable energy market is affected by various factors, including the pace of consumer shift towards renewable energy sources, global electricity demand, technological advancements that increase the generation and/or reduce the cost of renewable energy, expansion of offshore renewable energy projects to deeper water and other regions, and government subsidies for renewable energy projects. We expect growth in our renewables services as the energy market transitions to continued offshore renewable energy developments.

Current wording

We support the energy transition to renewable energy primarily in our Robotics segment through our services in offshore wind farm developments, primarily including subsea cable trenching and burial as well as seabed clearance and preparation services. Demand for our services in the renewable energy market is affected by various factors, including the pace of consumer shift towards renewable energy sources, global electricity demand, technological advancements that increase the generation and/or reduce the cost of renewable energy, expansion of offshore renewable energy projects to deeper water and other regions, and government subsidies for renewable energy projects. We expect growth in our renewables services as the energy market transitions to continued offshore renewable energy developments.

Previous wording

Our backlog is represented by signed contracts. As of June 30, 2024, our consolidated backlog totaled approximately $873 million, of which $443 million is expected to be performed over the remainder of 2024. Our various contracts with Shell, ExxonMobil and Subsea 7 globally, our contracts with Trident Energy and Petrobras in Brazil, and our agreement for theHP I in the Gulf of Mexico represented approximately 73% of our total backlog as of June 30, 2024. Backlog is not necessarily a reliable indicator of revenues derived from our contracts as services are often added but may sometimes be subtracted; contracts may be renegotiated, deferred, canceled and in many cases modified while in progress; and reduced rates, fines and penalties may be imposed by our customers. Furthermore, our contracts are in certain cases cancelable without penalty. If there are cancellation fees, the amount of those fees can be substantially less than amounts reflected in backlog.

Current wording

Our backlog is represented by signed contracts. As of September 30, 2024, our consolidated backlog totaled approximately $1.6 billion, of which $261 million is expected to be performed over the remainder of 2024. Our various contracts with Shell and ExxonMobil globally, our contracts with Trident Energy and Petrobras in Brazil, and our contracts with Talos in the Gulf of Mexico represented approximately 86% of our total backlog as of September 30, 2024. Backlog is not necessarily a reliable indicator of revenues derived from our contracts as services are often added but may sometimes be subtracted; contracts may be renegotiated, deferred, canceled and in many cases modified while in progress; and reduced rates, fines and penalties may be imposed by our customers. Furthermore, our contracts are in certain cases cancelable without penalty. If there are cancellation fees, the amount of those fees can be substantially less than amounts reflected in backlog.

Previous wording

In 2024, we expect to experience another strong year of performance driven by increasing demand for our decommissioning services internationally and continued growth in the offshore renewables trenching market. We expect the demand for shallow water decommissioning services in the Gulf of Mexico to remain soft in the near term but should grow over the mid- to long-term.

Current wording

For the remainder of 2024 going into 2025, we expect to continue our strong performance driven by increasing demand for our decommissioning services internationally and continued growth in the offshore renewables trenching market. We expect the demand for shallow water decommissioning services in the Gulf of Mexico to remain soft in the near term but should grow over the mid- to long-term.

Previous wording

Net Revenues. Our consolidated net revenues for the three-month period ended June 30, 2024 increased by 18% as compared to the same period in 2023, reflecting higher revenues in our Well Intervention, Robotics and Production Facilities business segments, offset in part by lower revenues in our Shallow Water Abandonment segment.

Current wording

Net Revenues. Our consolidated net revenues for the three-month period ended September 30, 2024 decreased by 13% as compared to the same period in 2023, reflecting lower revenues in our Well Intervention, Shallow Water Abandonment and Production Facilities business segments, offset in part by higher revenues in our Robotics segment.

Previous wording

Our Robotics revenues increased by 16% for the three-month period ended June 30, 2024 as compared to the same period in 2023, primarily reflecting higher chartered vessel days and trenching and ROV activities during the second quarter 2024. Chartered vessel days increased to 528 days during the second quarter 2024 as compared to 435 days during the second quarter 2023. ROV and trencher utilization increased to 76% in the second quarter 2024 from 58% during the second quarter 2023 and included 232 days of integrated vessel trenching in the second quarter 2024 as compared to 194 days in the second quarter 2023.

Current wording

Our Robotics revenues increased by 12% for the three-month period ended September 30, 2024 as compared to the same period in 2023, primarily reflecting higher vessel, trenching and ROV activities during the third quarter 2024. Chartered vessel activity increased to 532 days during the third quarter 2024 as compared to 506 days during the third quarter 2023. Integrated vessel trenching decreased to 249 days during the third quarter 2024 as compared to 276 days during the third quarter 2023, and the third quarter 2024 included 92 days utilization on the i-Plough trencher on a third-party vessel and 92 days utilization on the IROV boulder grab whereas the i-Plough and IROV were idle during the third quarter 2023. Overall ROV and trencher utilization increased to 77% in the third quarter 2024 from 67% during the third quarter 2023.

Previous wording

Our Shallow Water Abandonment revenues decreased by 33% for the three-month period ended June 30, 2024 as compared to the same period in 2023. The decrease in revenues was due to lower activity levels and an overall softer Gulf of Mexico shelf market in 2024, resulting in lower vessel and system utilization during the second quarter 2024 as compared to the second quarter 2023. Overall vessel utilization was 58% during the second quarter 2024 as compared to 78% during the second quarter 2023. P&A systems and CT systems achieved 632 days of utilization, or 27% on 26 systems, during the second quarter 2024 as compared to 1,554 days of utilization, or 81% on 21 systems, during the second quarter 2023.

Current wording

Our Shallow Water Abandonment revenues decreased by 18% for the three-month period ended September 30, 2024 as compared to the same period in 2023. The decrease in revenues was due to lower activity levels and an overall softer Gulf of Mexico shelf market in 2024 coupled with the impact of two hurricanes affecting our operations in September 2024, resulting in lower vessel and system utilization during the third quarter 2024 as compared to the third quarter 2023, offset in part by higher pass-through revenues on the P&A systems. Overall vessel utilization was 76% during the third quarter 2024 as compared to 89% during the third quarter 2023. P&A systems and CT systems utilization declined to 607 days of utilization, or 25%, during the third quarter 2024 as compared to 1,531 days of utilization, or 74%, during the third quarter 2023.

Previous wording

Gross Profit (Loss). Our consolidated gross profit increased by $20.1 million for the three-month period ended June 30, 2024 as compared to the same period in 2023, primarily reflecting increased profits from our Well Intervention, Robotics and Production Facilities business segments, offset in part by a reduction in profit from our Shallow Water Abandonment segment.

Current wording

Gross Profit (Loss). Our consolidated gross profit decreased by $14.9 million for the three-month period ended September 30, 2024 as compared to the same period in 2023, primarily reflecting a reduction in profit from our Shallow Water Abandonment business segment, offset in part by an increase in profit from our Robotics segment.

Previous wording

Our Robotics gross profit increased by $11.4 million for the three-month period ended June 30, 2024 as compared to the same period in 2023, primarily reflecting higher revenues and higher profit margin projects during the second quarter 2024.

Current wording

Our Robotics gross profit increased by $4.0 million for the three-month period ended September 30, 2024 as compared to the same period in 2023, primarily reflecting higher revenues during the third quarter 2024.

Previous wording

Our Production Facilities gross profit increased by $1.2 million for the three-month period ended June 30, 2024 as compared to the same period in 2023, primarily reflecting higher segment revenues.

Current wording

Our Production Facilities gross profit decreased by $0.9 million for the three-month period ended September 30, 2024 as compared to the same period in 2023, primarily reflecting lower revenues, offset in part by lower production costs.

Previous wording

Change in Fair Value of Contingent Consideration. The change in fair value of contingent consideration in the second quarter 2023 reflected an improvement in Helix Alliance’s results during the quarter. We entered into an agreement and set the final earn-out during the fourth quarter 2023, which was paid on April 3, 2024.

Current wording

Change in Fair Value of Contingent Consideration. The change in fair value of contingent consideration in the third quarter 2023 reflects an improvement in Helix Alliance’s results during the quarter. We entered into an agreement and set the final earn-out during the fourth quarter 2023, which was paid on April 3, 2024.

Previous wording

Selling, General and Administrative Expenses. Our selling, general and administrative expenses were $22.3 million for the three-month period ended June 30, 2024 as compared to $24.0 million for the same period in 2023, primarily reflecting lower employee compensation costs.

Current wording

Selling, General and Administrative Expenses. Our selling, general and administrative expenses were $21.1 million for the three-month period ended September 30, 2024 as compared to $27.8 million for the same period in 2023, primarily reflecting lower employee compensation costs.

Previous wording

Net Interest Expense. Our net interest expense totaled $5.9 million for the three-month period ended June 30, 2024 as compared to $4.2 million for the same period in 2023, primarily reflecting interest expense on our 2029 Notes, offset in part by higher interest income on our invested cash reserves (Note 5).

Current wording

Net Interest Expense. Our net interest expense totaled $5.7 million for the three-month period ended September 30, 2024 as compared to $4.2 million for the same period in 2023, primarily reflecting higher debt levels and rates on our 2029 Notes in 2024 as compared to our 2026 Notes in 2023, offset in part by higher interest income on our invested cash reserves (Note 5).

Previous wording

Other Expense, Net. Net other expense was $0.4 million for the three-month period ended June 30, 2024 as compared to net other expense of $5.7 million for the same period in 2023. Net other expense during the second quarter 2023 primarily reflected an $11.7 million foreign currency loss related to the devaluation of the Nigerian naira on our naira cash holdings, offset in part by foreign currency gains due to the strengthening of the British pound primarily on U.S. dollar denominated intercompany debt in our U.K. entities.

Current wording

Other Expense, Net. Net other expense was minimal for the three-month period ended September 30, 2024 as compared to $8.3 million for the same period in 2023. Net other expense during the third quarter 2024 primarily reflects a $2.4 million increase in the value of incentive credits granted to the seller of P&A equipment acquired in 2023 (Note 3), offset by foreign currency gains due to the strengthening of the British pound. Net other expense during the third quarter 2023 primarily reflects foreign currency losses related to U.S. dollar denominated intercompany debt in our U.K. entities.

Previous wording

Income Tax Provision. Income tax provision was $14.7 million for the three-month period ended June 30, 2024 as compared to $3.3 million for the same period in 2023. The effective tax rates for the three-month periods ended June 30, 2024 and 2023 were 31.3% and 31.8%, respectively. The increase in income tax expense was primarily attributable to higher net income.

Current wording

Income Tax Provision. Income tax provision was $9.5 million for the three-month period ended September 30, 2024 as compared to $8.3 million for the same period in 2023. The effective tax rates for the three-month periods ended September 30, 2024 and 2023 were 24.4% and 34.9%, respectively. The increase in income tax expense was primarily attributable to higher net income (Note 6).

Previous wording

Net Revenues. Our consolidated net revenues for the six-month period ended June 30, 2024 increased by 18% as compared to the same period in 2023, reflecting higher revenues in our Well Intervention, Robotics and Production Facilities business segments, offset in part by lower revenues in our Shallow Water Abandonment segment.

Current wording

Net Revenues. Our consolidated net revenues for the nine-month period ended September 30, 2024 increased by 5% as compared to the same period in 2023, reflecting higher revenues in our Well Intervention, Robotics and Production Facilities business segments, offset in part by lower revenues in our Shallow Water Abandonment segment.

Previous wording

Our Well Intervention revenues increased by 49% for the six-month period ended June 30, 2024 as compared to the same period in 2023, primarily reflecting higher revenues on theQ7000 and higher rates and utilization on theSeawell, theQ4000 and theQ5000, offset in part by lower utilization on theWell Enhancer. TheQ7000 had full utilization during the six-month period ended June 30, 2024 whereas the vessel spent most of the six-month period ended June 30, 2023 on regulatory and project-related dockings and paid transit and mobilization to Asia Pacific. TheSeawell benefitted from being contracted in the western Mediterranean at higher rates during most of the six-month period ended June 30, 2024 as compared to having had lower utilization and rates during the same period in 2023. Utilization increased on theQ4000 and theQ5000 during the six-month period ended June 30, 2024 as both vessels underwent their regulatory dry docks during the six-month period ended June 30, 2023. Gulf of Mexico day rates also improved during the year over year periods. TheWell Enhancer in the North Sea had lower utilization as compared to the prior year period as the vessel underwent a scheduled dry dock during the first quarter 2024.

Current wording

Our Well Intervention revenues increased by 19% for the nine-month period ended September 30, 2024 as compared to the same period in 2023, primarily reflecting higher revenues across our well intervention fleet except for theWell Enhancer. Utilization increased on theQ4000 and theQ5000 during the nine-month period ended September 30, 2024 as both vessels underwent their regulatory dry docks in 2023. TheQ7000 had higher utilization during the nine-month period ended September 30, 2024 as compared to 2023. TheSeawell‘s contract in the western Mediterranean, which completed in June 2024, has provided higher rates and utilization during the nine-month period ended September 30, 2024 as compared to the nine-month period ended September 30, 2023. TheWell Enhancer in the North Sea had lower utilization as compared to the prior year period as the vessel underwent a scheduled dry dock during the first quarter 2024.

Previous wording

Our Robotics revenues increased by 10% for the six-month period ended June 30, 2024 as compared to the same period in 2023, primarily reflecting higher chartered vessel days and trenching and ROV activities. Chartered vessel days increased to 861 days during the six-month period ended June 30, 2024 as compared to 730 days during the six-month period ended June 30, 2023, although chartered vessel days in the first quarter 2024 included approximately 64 days of standby utilization at reduced rates. ROV and trencher utilization increased to 67% in the six-month period ended June 30, 2024 from 57% during the six-month period ended June 30, 2023 and included 317 days of integrated vessel trenching in 2024 as compared to 260 days in 2023.

Current wording

Our Robotics revenues increased by 11% for the nine-month period ended September 30, 2024 as compared to the same period in 2023, primarily reflecting higher chartered vessel days and trenching and ROV activities. Chartered vessel activity increased to 1,393 days during the nine-month period ended September 30, 2024 as compared to 1,236 days during the nine-month period ended September 30, 2023, although chartered vessel days in the first quarter 2024 included approximately 64 days of standby utilization at reduced rates. Overall ROV and trencher utilization increased to 70% in the nine-month period ended September 30, 2024 from 60% during the nine-month period ended September 30, 2023 and included 566 days of integrated vessel trenching in 2024 as compared to 536 days in 2023.

Previous wording

Our Shallow Water Abandonment revenues decreased by 38% for the six-month period ended June 30, 2024 as compared to the same period in 2023. The decrease in revenues is due to lower activity levels and an overall softer Gulf of Mexico shelf market in 2024, resulting in lower vessel and system utilization during the six-month period ended June 30, 2024 as compared to the six-month period ended June 30, 2023. Overall vessel utilization was 49% during the six-month period ended June 30, 2024 as compared to 68% during the same period in 2023. P&A systems and CT systems achieved 1,258 days of utilization, or 27% on 26 systems, during the six-month period ended June 30, 2024 as compared to 2,831 days of utilization, or 74% on 21 systems, during the six-month period ended June 30, 2023.

Current wording

Our Shallow Water Abandonment revenues decreased by 30% for the nine-month period ended September 30, 2024 as compared to the same period in 2023. The decrease in revenues was due to lower activity levels and an overall softer Gulf of Mexico shelf market in 2024, resulting in lower vessel and system utilization during the nine-month period ended September 30, 2024 as compared to the nine-month period ended September 30, 2023. Overall vessel utilization was 59% during the nine-month period ended September 30, 2024 as compared to 75% during the same period in 2023. P&A systems and CT systems achieved 1,865 days of utilization, or 26%, during the nine-month period ended September 30, 2024 as compared to 4,362 days of utilization, or 74%, during the nine-month period ended September 30, 2023.

Previous wording

Our Production Facilities revenues increased by 13% for the six-month period ended June 30, 2024 as compared to the same period in 2023, primarily reflecting higher oil and gas production as both the Droshky and Thunder Hawk wells were shut in for planned maintenance during portions of the six-month period ended June 30, 2023.

Current wording

Our Production Facilities revenues increased by 3% for the nine-month period ended September 30, 2024 as compared to the same period in 2023, primarily reflecting higher oil and gas production and lower number of shut-in days.

Previous wording

Gross Profit (Loss). Our consolidated gross profit increased by $24.5 million for the six-month period ended June 30, 2024 as compared to the same period in 2023, primarily reflecting increased profits from our Well Intervention and Robotics business segments, offset in part by losses from our Shallow Water Abandonment and Production Facilities segments.

Current wording

Gross Profit (Loss). Our consolidated gross profit increased by $9.6 million for the nine-month period ended September 30, 2024 as compared to the same period in 2023, primarily reflecting increased profits from our Well Intervention and Robotics business segments, offset in part by losses from our Shallow Water Abandonment and Production Facilities segments.

Previous wording

Our Well Intervention segment gross profit increased by $26.6 million for the three-month period ended June 30, 2024 as compared to the same period in 2023, primarily reflecting higher segment revenues and increased activity levels.

Current wording

Our Well Intervention segment gross profit increased by $54.6 million for the nine-month period ended September 30, 2024 as compared to the same period in 2023, primarily reflecting higher segment revenues and increased activity levels.

Previous wording

Our Robotics gross profit increased by $12.5 million for the six-month period ended June 30, 2024 as compared to the same period in 2023, primarily reflecting higher revenues and higher profit margin projects during the six-month period ended June 30, 2024.

Current wording

Our Robotics gross profit increased by $16.5 million for the nine-month period ended September 30, 2024 as compared to the same period in 2023, primarily reflecting higher revenues and higher profit margin projects during the nine-month period ended September 30, 2024.

Previous wording

Our Shallow Water Abandonment gross profit decreased by $19.3 million for the three-month period ended June 30, 2024 as compared to the same period in 2023, primarily reflecting lower segment revenues.

Current wording

Our Shallow Water Abandonment gross profit decreased by $55.0 million for the nine-month period ended September 30, 2024 as compared to the same period in 2023, primarily reflecting lower segment revenues.

Previous wording

Our Production Facilities gross profit decreased by $5.9 million for the six-month period ended June 30, 2024 as compared to the same period in 2023, primarily reflecting well workover costs of approximately $8.6 million related to the Thunder Hawk wells during the first quarter 2024, offset in part by higher segment revenues.

Current wording

Our Production Facilities gross profit decreased by $6.7 million for the nine-month period ended September 30, 2024 as compared to the same period in 2023, primarily reflecting well workover costs of approximately $8.6 million related to the Thunder Hawk wells during the first quarter 2024, offset in part by higher segment revenues.

Previous wording

Change in Fair Value of Contingent Consideration. The change in fair value of contingent consideration in the six-month period ended June 30, 2023 reflected an improvement in Helix Alliance’s results during the first half 2023. We entered into an agreement and set the final earn-out during the fourth quarter 2023, which was paid on April 3, 2024.

Current wording

Change in Fair Value of Contingent Consideration. The change in fair value of contingent consideration in the nine-month period ended September 30, 2023 reflects an improvement in Helix Alliance’s results during the first half 2023. We entered into an agreement and set the final earn-out during the fourth quarter 2023, which was paid on April 3, 2024.

Previous wording

Net Interest Expense. Our net interest expense totaled $11.4 million for the six-month period ended June 30, 2024 as compared to $8.4 million for the same period in 2023, primarily reflecting interest expense on our 2029 Notes, offset in part by higher interest income on our invested cash reserves (Note 5).

Current wording

Net Interest Expense. Our net interest expense totaled $17.1 million for the nine-month period ended September 30, 2024 as compared to $12.6 million for the same period in 2023, primarily reflecting higher debt levels and rates on our 2029 Notes in 2024 as compared to our 2026 Notes in 2023, offset in part by higher interest income on our invested cash reserves (Note 5).

Previous wording

Losses Related to Convertible Senior Notes. The $20.9 million loss for the six-month period ended June 30, 2024 was associated with the retirement of our 2026 Notes (Note 5).

Current wording

Losses Related to Convertible Senior Notes. The $20.9 million loss for the nine-month period ended September 30, 2024 was associated with the retirement of our 2026 Notes (Note 5).

Previous wording

Income Tax Provision. Income tax provision was $13.0 million for the six-month period ended June 30, 2024 as compared to $1.3 million for the same period in 2023. The effective tax rates for the six-month periods ended June 30, 2024 and 2023 were 68.5% and 40.1%, respectively. The increase in effective tax rates was primarily attributable to the non-deductibility of certain losses associated with the 2026 Notes Redemptions, which was characterized as a discrete event and reported in the first quarter 2024 (Note 6).

Current wording

Income Tax Provision. Income tax provision was $22.5 million for the nine-month period ended September 30, 2024 as compared to $9.6 million for the same period in 2023. The effective tax rates for the nine-month periods ended September 30, 2024 and 2023 were 38.8% and 35.5%, respectively. The increase in effective tax rates was primarily attributable to the non-deductibility of certain losses associated with the 2026 Notes Redemptions, which was characterized as a discrete event and reported in the first quarter 2024 (Note 6).

Previous wording

Long-term debt in the table above includes our MARAD Debt, the 2026 Notes and the 2029 Notes and excludes current maturities of $9.0 million at June 30, 2024 and $48.3 million at December 31, 2023, and is net of unamortized debt discount and debt issuance costs. See Note 5 for information relating to our long-term debt.

Current wording

Long-term debt in the table above includes our MARAD Debt, the 2026 Notes and the 2029 Notes and excludes current maturities of $9.2 million at September 30, 2024 and $48.3 million at December 31, 2023, and is net of unamortized debt discount and debt issuance costs. See Note 5 for information relating to our long-term debt.

Previous wording

We define liquidity as cash and cash equivalents plus available capacity under our credit facility. Our liquidity at June 30, 2024 included $275.1 million of cash and cash equivalents and $95.1 million of available borrowing capacity under the Amended ABL Facility (Note 5). Our liquidity at December 31, 2023 included $332.2 million of cash and cash equivalents and $99.3 million of available borrowing capacity under the Amended ABL Facility. In March 2024, we settled the remaining $40.2 million aggregate principal amount of the 2026 Notes for $60.5 million in cash (excluding costs), offset in part by $4.4 million from the settlement of the remaining 2026 Capped Calls. On April 3, 2024, we paid $85.0 million of earn-out consideration in cash to the seller in the Alliance transaction.

Current wording

We define liquidity as cash and cash equivalents plus available capacity under our credit facility. Our liquidity at September 30, 2024 included $324.1 million of cash and cash equivalents and $74.7 million of available borrowing capacity under the Amended ABL Facility (Note 5). Our liquidity at December 31, 2023 included $332.2 million of cash and cash equivalents and $99.3 million of available borrowing capacity under the Amended ABL Facility. The reduction in availability on the Amended ABL Facility was attributable to higher letter of credit usage due to the Nigeria project on theQ4000.

Previous wording

In the current market environment, following the settlement of the Alliance earn-out we expect strong ongoing operating performance and cash flows and continued availability on the Amended ABL Facility. We believe that our cash on hand, internally generated cash flows and availability under the Amended ABL Facility will be sufficient to fund our operations and expected capital spending, service our debt and other obligations, and execute our share repurchase program over at least the next 12 months. We currently do not anticipate borrowing under the Amended ABL Facility other than for the issuance of letters of credit.

Current wording

In the current market environment, we expect strong ongoing operating performance and cash flows. We believe that our cash on hand, internally generated cash flows and availability under the Amended ABL Facility will be sufficient to fund our operations and expected capital spending, service our debt and other obligations, and execute our share repurchase program over at least the next 12 months. We currently do not anticipate borrowing under the Amended ABL Facility other than for the issuance of letters of credit. We expect lower levels of availability on the Amended ABL Facility while theQ4000 performs work in Nigeria due to fewer eligible receivables and higher letter of credit usage.

Previous wording

The increase in our operating cash flows for the six-month period ended June 30, 2024 as compared to the same period in 2023 primarily reflects higher operating income, and lower regulatory recertification costs for our vessels and systems, offset in part by higher working capital outflows. Operating cash outflows during the six-month period ended June 30, 2024 included $58.3 million of the $85.0 million earn-out payment on April 3, 2024, representing the amount in the excess of the $26.7 million fair value of earn-out consideration at the Alliance acquisition date. Regulatory recertification spend on our vessels and systems amounted to $20.3 million and $41.3 million, respectively, during the comparable year over year periods.

Current wording

The increase in our operating cash flows for the nine-month period ended September 30, 2024 as compared to the same period in 2023 primarily reflects higher operating income, lower regulatory recertification costs for our vessels and systems and lower working capital outflows. Operating cash outflows during the nine-month period ended September 30, 2024 included $58.3 million of the $85.0 million earn-out payment on April 3, 2024, representing the amount in the excess of the $26.7 million initial fair value of earn-out consideration at the Alliance acquisition date. Regulatory recertification spend on our vessels and systems were $29.2 million and $59.2 million, respectively, during the comparable year over year periods.

Previous wording

Net cash outflows from financing activities for the six-month period ended June 30, 2024 primarily reflect cash outflows of $60.7 million related to the 2026 Notes, $26.7 million of the $85.0 million earn-out payment, $10.2 million in repurchases of our common stock under the 2023 Repurchase Program and the principal repayment of $4.3 million related to the MARAD Debt, offset in part by $4.4 million from the proportionate settlement of the 2026 Capped Calls. Net cash outflows from financing activities for the six-month period ended June 30, 2023 primarily reflect $10.1 million in repurchases of our common stock under the 2023 Repurchase Program and the repayment of $4.1 million related to the MARAD Debt.

Current wording

Net cash outflows from financing activities for the nine-month period ended September 30, 2024 primarily reflect the final retirement of our 2026 Notes and the earn-out payment. Cash outflows in 2024 included $60.7 million related to the 2026 Notes, $26.7 million of the $85.0 million earn-out payment, $10.2 million in repurchases of our common stock under the 2023 Repurchase Program and the principal repayment of $8.7 million related to the MARAD Debt, offset in part by $4.4 million of cash inflows from the proportionate settlement of the 2026 Capped Calls.